Digital China Financial Software Ltd. (DCFS), China’s biggest financial IT service provider and Misys have signed a strategic cooperation agreement to deliver a new, hosted, banking solution targeted at the estimated 30,000 small and medium-sized banks in China.

The new solution will be based on DCFS’ ModelB@nk integrated structure and the Misys Equation core banking system, with trade services, international settlement and treasury management functionality integrated within it. The new solution, available as an Application Service Provider (ASP), will provide a lower cost solution for banking customers while helping to improve efficiencies across China’s financial industry.

As China is opening its financial markets, small and medium-sized Chinese and foreign banks, need IT solutions that deliver innovative services and enable them to get ahead of their competitors. These banks are often limited by budget and size and the new ASP solution will enable them to overcome the significant cost and resource issues associated with IT development.

DCFS and Misys will provide a solution which delivers the value that small and medium sized banks need at a cost they can afford. Using the DCFS’ ModelB@nk integrated solution as the basic framework and integrating it with Misys Equation, Misys Trade Innovation and Misys Opics, provides a best of breed, advanced core banking platform which will be hosted—an entirely new application outsourcing service for banks. The rapidly developing Chinese banking industry provides the IT outsourcing market with a great opportunity for growth. This solution will help banks quickly adopt advanced technology and stay ahead of the competition.

In the next few years, the Chinese banking industry will benefit from a new wave of globalization in IT applications. An ASP service will serve as an important mechanism for quickly benefiting from new and emerging technologies. The banking IT solutions market in China could reach RMB14.751 billion by 2011 (£1billion) with annual growth of 19.6% from 2007 to 2011.

Core Banking will remain the biggest sub-market in the Chinese banking application solutions market, which is expected to reach 16.3% by 2011 and will top RMB2.4 billion (£163m). DCFS and Misys believe that there are significant opportunities in the financial ASP service in China. (Mysis)